Reflecting on My Failure to Build a Billion-Dollar Company

Post by hedvig » Thu, Feb 07, 2019, 6:56 PM UTC

will_brown wrote: post #16

holman wrote: post #11

Really love this post. My favorite line is: > Every month of less than 20% growth should have been a red flag. I think that's pretty insightful. 20% growth is great for a normal business, of course; for a VC-backed startup it can show some warning signs about future hard decisions you might have to face. I think there's certainly lots of discussion that has been had — and should be had — about "should I or shouldn't…

These “metrics” are exactly why you see these venture backed SV companies engage in the behavior we saw posted all over the front page of HN yesterday (I.e. silently apply workers tips to their “guaranteed” pay and pocket the difference). But hey it’s an HN/SV unicorn, so there is too much investment that needs to be made back to fail now...and they have the perfect back story, rejected from YC until they personally…

Post by komali2 » Thu, Feb 07, 2019, 7:01 PM UTC

supermw wrote: post #99

libria wrote: post #93

Earlier quoted context omitted.

> There is, of course, the $178,000,000 we have {sent, channelled, moved-through-our-platform, assisted in transferring} to creators All of the above seem synonymous and none seems particularly malicious, but "sent" is easiest way to express it. For a marketplace, I don't think anyone's naive to believe the host is directly advancing funds to the tune of millions. Is it really necessary to nitpick that?

They should have said $178,000,000 in transactions.

Post by nabnob » Thu, Feb 07, 2019, 7:04 PM UTC

crispyporkbites wrote: post #117

eanzenberg wrote: post #82

Jesus this part sucks: "In those nine months, when the whole team knew that we were fighting for our company’s life, not a single person left Gumroad. From “this is gonna be hard,” to “yep, turns out it was,” every single person worked harder than ever." Did everyone one of these people have significant equity in the company? I'd expect people who love their jobs and who work on something crucial, such as researching…

If gumroad became a billion dollar company you'd be retiring on that 9 months of work with even a tiny bit of equity. I bet there are plenty of people that bailed out of google, facebook or other similarly positioned startups at that stage and regret it.

Post by TheKarateKid » Thu, Feb 07, 2019, 7:09 PM UTC

ryanSrich wrote: post #122

AznHisoka wrote: post #4

I wasn't interested in the emotional story behind this. But I did resonate with 1 line in particular here: "It doesn’t matter how amazing your product is, or how fast you ship features. The market you’re in will determine most of your growth." This is so true, in my experience. You hit a roadblock in recurring revenue, not because your product doesn't have enough features, or your team sucks, but simply: your market…

Scaling to a billion dollar company in that market was certainly attainable. Patreon started two years after Gumroad and now look where they are. Gumroad had a movers first advantage - so I really disagree with the quote. Had they continued to push feature development and tweak PMF they could have been a billion dollar company. Don't take that as a slight to Gumroad either. Building a profitable business from almost…

Post by rsp1984 » Thu, Feb 07, 2019, 7:13 PM UTC

sahillavingia wrote: post #101

rsp1984 wrote: post #91

Earlier quoted context omitted.

Hello Sahil, thanks so much for sharing this. I know it helps a lot of founders out there. One question: You mentioned that you raised ~$8m from investors, but that your liq. preferences used to be $16.5m. Was there a 2x preference in the Series A term sheet?

$1.1M @ 1X $7M @ 1X $2.25M (the bridge I mention) @ 4X